The Libyan rebels closing in on the town of Bani Walid controlled by loyalists of fugitive leader
Moamer Gaddafi, were late Monday still deciding whether to storm it, DPA reported.
Abdel-Razeq Abu Kraa, a rebel based in Tripoli, said earlier they were expected to make that decision within hours. He said one of Gaddafi's sons - either Saadi or Saif al-Islam - was likely to be in the town.
There were reports that Gaddafi's spokesman Moussa Ibrahim was still in the town, which is home to the Warfala - one of the biggest tribes in the country.
Abu Kraa told the German Press Agency dpa: "The city is besieged, it is easy to enter, but very hard for anyone inside to get out. Gaddafi's forces must surrender their arms and any high-profile loyalists."
The rebels have said they are prepared to enter the town, after earlier talks failed to peacefully end the standoff between them and Gaddafi loyalists.
Anti-Gaddafi fighters claim key posts outside Bani Walid, located about 180 kilometres south-east of Tripoli.
"We believe that the Gaddafi forces are intimidating the residents by the force of arms, this is why negotiations have failed," Abu Kraa said.
According to broadcaster Al Jazeera, the rebels have pushed to within 7 kilometres of the centre of Bani Walid, but have retreated a little awaiting possible further talks.
Gaddafi is still on the run, although the rebels control most of the North African country and are working on setting up a new government to replace the ousted leader's regime.
Meanwhile, NATO Secretary General Anders Fogh Rasmussen said the military alliance's operation continues in Libya and that capturing Gaddafi was not the "decisive factor" for ending it.
"What will play a crucial role is the capability of the National Transitional Council to actually ensure effective protection of the civilian population," he told reporters in Brussels.
"Unfortunately we have seen that Gaddafi forces still constitute a threat to the civilian population in Libya, and this is the reason why we have to continue our operation until these threats do not exist any longer," he said.
NATO assumed command of all air operations over Libya on March 31 to enforce a United Nations-authorized no-fly zone aimed at protecting civilians.